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Technology Stocks : CheckFree Holdings Corp. (CKFR), the next Dell, Intel? -- Ignore unavailable to you. Want to Upgrade?

To: David H. Zimmer who wrote (7024)	6/24/1999 4:28:00 PM
From: Doug Robinson	Respond to of 20297

Excellent article from Individual Investor if you haven't seen it! CheckFree Sell-Off an Act of Sheer Lunacy Staff Writer: Eliot Walsh (6/23/99) Investors slammed shares of Internet-based full-service billing company CheckFree (NASDAQ: CKFR - Quotes, News, Boards) today. The exodus comes on Tuesday evening's news that Chase Manhattan Bank (NYSE: CMB - Quotes, News, Boards), First Union (NYSE: FTU - Quotes, News, Boards), and Wells Fargo & Co. (NASDAQ: WFC - Quotes, News, Boards) are forming a new consortium which will deliver bills electronically. The markets interpreted this eventuality as a direct threat to CheckFree's market share, and the company's share price fell 24% to $28.75 from $37. Company officials, alarmed at the market's reaction to the news, held a press conference Wednesday afternoon in an effort to allay shareholder panic. Openly registering his 'disappointment in the market's reaction' to the news, CheckFree CEO Peter Kight called the bank deal 'far less significant' than investors obviously believe it to be. He pointed out that the bank consortium, called The Exchange, intends only to 'create an electronic look-up facility to connect bills with their intended recipients and … try to sell this facility to other banks that are each expected to try to sign up billers.' The Exchange does not intend to build an end-to-end, bill-presentation to bill-payment electronic infrastructure such as CheckFree's. which is the undeniable market leader in end-to-end e-payment systems. 'There was no announcement of any intent to create a pay-anyone capability, no announcement of any pooling of technological resources to create better bills for billers, and nothing that threatens CheckFree,' Kight said. Investors didn't seem to buy it. In a conference call earlier Wednesday, the banks themselves acknowledged that CheckFree actually provides e-payment infrastructure to them, and that they 'had no intention of altering that relationship,' according to a statement. Kight further pointed out that while bill delivery is a part of CheckFree's business, and that there would be some degree of competition as a result of The Exchange's genesis, the company's exposure is very limited. Indeed, according to the CEO's statement, 'CheckFree derived less than $10,000 of its more than $179 million of revenue from the delivery of electronic bills.' Bottom Line: CheckFree is the undisputed market leader of end-to-end electronic billing systems, and the market's reaction to news of The Exchange's inception was nothing more than groundless panic. We see this as an attractive buying opportunity.